Democratic Party Plans Major Government Overhaul: Budget and Tax Functions to Be Split, New Ministry of Energy Proposed

Major Overhaul Announced if Elected
Budget Authority of Ministry of Economy and Finance to Presidential Office
Further Segmentation of Ministry of Trade, Industry and Energy Planned
Separation of Prosecutorial Investigation and Indictment Powers Also Under Review

Lee Jae Myung, the Democratic Party presidential candidate, has announced plans for a sweeping overhaul of the government structure if elected. The core of the plan involves dividing the functions of the Ministry of Economy and Finance, and further segmenting overlapping functions within the Ministry of Trade, Industry and Energy. Changes to the functions of the prosecution are also anticipated. The justification for this major government restructuring is to enhance efficiency and accountability by reallocating authority and reorganizing key agencies.

According to the Democratic Party on the 29th, changes to the budget authority of the Ministry of Economy and Finance are being discussed as a major reform measure. There are reportedly considerations to split the ministry into a Planning and Budget Office and a Ministry of Finance and Economy, with budget authority placed under the Prime Minister's Office. Another option under review is transferring budget authority to the Presidential Office, but concerns about the excessive expansion of the Presidential Office remain a variable.

Currently, the Ministry of Economy and Finance holds both the authority to formulate the national budget and fiscal powers such as tax reform. This means it is responsible for managing the nation’s finances with tax revenue collected from the public, as well as overseeing the stable management of national assets.

The Democratic Party believes the problem lies in the Ministry of Economy and Finance having become a "ministry above ministries," resulting in an excessive concentration of power. The party argues that such concentrated authority in the ministry is prone to abuse. In fact, Lee stated in his acceptance speech as the Democratic Party presidential candidate on the 27th, "There are concerns that the Ministry of Economy and Finance controls both economic planning and fiscal management." He indicated that the ministry acts as a "king" among government agencies.

Lee Jae Myung, the Democratic Party presidential candidate, is reviewing materials while attending the 'K-Semiconductor' AI memory semiconductor company meeting held on the afternoon of the 28th at SK Hynix Icheon Campus in Icheon, Gyeonggi Province. 2025.4.28 Photo by Kim Hyun Min

There is precedent for separating the powers of the Ministry of Economy and Finance. In the past, the Roh Moo Hyun administration divided its functions between the Ministry of Finance and Economy, which handled policy, and the Planning and Budget Office. Within the Democratic Party, a leading proposal is to separate the policy and budget functions of the ministry and place them under a "Planning and Budget Office" subordinate to the Prime Minister, while reorganizing the remaining functions into a Ministry of Finance. Another proposal being discussed is to place the Planning and Budget Office within the Presidential Office.

Some observers analyze that Lee is seeking to secure budgetary authority through this organizational reform, in addition to party leadership and legislative power. They interpret this as a move that would accelerate the handling of issues such as local currency budgets, which have previously been blocked by the Ministry of Economy and Finance.

For the Ministry of Trade, Industry and Energy, a plan to divide its functions by sector?such as industry, trade, and climate energy?is under serious consideration. The proposal includes establishing a new Ministry of Climate and Energy to integrate energy policy from the Ministry of Trade, Industry and Energy with climate and carbon-related functions from the Ministry of Environment. This was also one of Lee's campaign pledges during the 2022 presidential election.

There are also plans to separate the investigative and prosecutorial powers of the prosecution. The aim is to strengthen the dispersion and oversight of prosecutorial authority to ensure fairness in the rule of law. During a televised debate in the primary, Lee stated, "We must end the system where the prosecution holds both the right to indict and the right to investigate," and added, "I am considering significantly strengthening the Corruption Investigation Office for High-ranking Officials (CIO)."

This content was produced with the assistance of AI translation services.